Rhapsody has been in the market for more than ten years, and they’ve licensed – and relicensed – the major labels over and over again.
They also have more than one million subscribers, but they’ve accomplished that with immense licensing overhead. And now, a top licensing lawyer at the company says this system is simply not working.
Here’s what Rhapsody VP and General Counsel Cecily Mak told an audience at Digital Music Forum East in New York on Thursday.
“Speaking for the smaller distributor or one that’s seeking to enter into market, perhaps the bigger problem is getting the sound recording license in the first place. We had as recently as last week at SF MusicTech somebody from a major record label [ie, UMG executive David Ring] basically sit there and say publicly that to get that license from the major record label you need to bring significant advances [and] you need to give up equity in your company.”
“I could comment further on that but it’s just a brutal, brutal reality for companies that want to do something really innovative and cool and come into market. And I think it’s perhaps too significant of a barrier.”